The government of Oman has given the final go-ahead for the UK’s BP to develop the Khazzan tight gas field, following months of negotiations.

The full field development will involve a drilling programme of about 300 wells over 15 years, with the target of producing a billion cubic feet a day (cf/d) of gas, the equivalent of a third of the sultanate’s current output.

BP estimated the total investment required for the development at $16bn, which includes investments made to date in the appraisal of the resource.

Construction work on the project, located in Block 61 in the central north of the sultanate, will begin in 2014 and the first gas is expected to be produced in 2017.

“Gas production is expected to ramp up to plateau in 2018 and in total, the scheme is expected to develop about 7 trillion cubic feet of gas, which will require BP to successfully deploy new technologies,” the company said in a statement.

Muscat and BP signed a sales gas agreement and an amending production-sharing agreement for an initial 30 years, which also provides for additional appraisal of gas resources in the block. This could lead to further project phases.

State-owned Oman Oil Company Exploration & Production (OOCEP) has announced its intent to take a 40 per cent stake in Block 61.

In June, BP asked for the contact details of companies interested in bidding for some of the scheme’s major production and export facilities packages.

The deal for the largest engineering, procurement and construction (EPC) package – the estimated $1.5bn central processing facility (CPF) – is now expected to be signed later in December or in early 2014.  

Firms bidding for the package are thought to include the US-based Bechtel and CB&I, South Korea’s Hyundai Engineering & Construction, the UK-based Petrofac and France’s Technip.